China’s Best Kept Secret: 1688, the Hidden Gem for ECommerce Sellers
March 16, 2023
While you probably know of Chinese B2B wholesaler Alibaba, you may not have heard of 1688 yet. Both online retail platforms are owned by the same entity, but the latter offers similar products for significantly better prices. This is possible because Alibaba is riddled with middlemen and resellers that take a percentage of a product’s original retail prices.
1688, on the other hand, gives customers direct access to suppliers and manufacturers. That means prices are almost always lower than on Alibaba. What’s even better is that it offers a purchasing process that is a lot more transparent as well. The catch is that it is rather unaccommodating to buyers not based in China. In this article, we will explore whether 1688 is worth exploring for US-based eCommerce sellers.
Table of Contents:
- What is 1688?
- Why does 1688 have better prices than Alibaba?
- How else is 1688 better than Alibaba?
- Downsides of 1688, compared to Alibaba
- How to use 1688
- What Companies Should Consider Before Choosing Alibaba or 1688
1688 is a B2B platform that was established for the Chinese domestic market in 1999. The vast majority of sellers are Chinese, with its initial purpose being to facilitate wholesaling within the country. The site is ideal for procuring everything including industrial equipment, clothing, raw materials for manufacturing, and electronics.
1688 is used by manufacturers and suppliers that don’t have the marketing capabilities or know-how to advertise and sell their products internationally. The site is exclusively in Mandarin, meaning sellers can operate in their mother tongue. This ease of doing business has attracted lots of companies to the platform, which resulted in strong competition, keeping prices low. Additionally, many sellers on Alibaba order their products from 1688 and forward them to international clients. That means online sellers from outside of China lose some of their profits to these intermediaries.
Transparency. On Alibaba, buyers often have to reach out to sellers for prices. This can result in products that seemed to cost little being offered for a higher price. Reasons like production costs going up or increased product quality are often given. On 1688’s platform prices are transparent, like on marketplaces such as Amazon, removing the possibility of getting tricked into paying above market rate.
Low minimum order quantity (MOQ). Whereas on Alibaba you often have to order a huge batch of products as a minimum, 1688 allows you to order as little as two or three of a given item. That is ideal for small eCommerce sellers that don’t have great cash flow and want to test out a product’s viability before fully committing to selling it. It’s also a great way to ensure quality before making any major financial commitments.
Direct contact. On 1688 you get unfiltered access to the manufacturer or supplier of a product. You get their contact information, allowing you to communicate with them directly. Alibaba doesn’t allow for this kind of connection since most of its sellers are middlemen who benefit from being the intermediary between you and suppliers. Being able to communicate directly gives you the possibility to customize your orders and negotiate better conditions. It also facilitates building a stronger relationship that can yield trust and mutual benefits.
Product variety. 1688 has a significantly larger choice of products than Alibaba. This is because many Chinese manufacturers prefer to sell their goods locally, rather than deal with the paperwork of international transactions and shipping. They are happy to cater to the more than lucrative enough Chinese eCommerce market, which has the biggest customer population in the world, over 780 million people. This means you will find much more variety than on Alibaba.
Language barrier. Everything on 1688’s site is done in Mandarin, making finding what you want a lot harder. Besides the difficulty in figuring out the right keywords for searches, it also means communication with sellers is a lot more complicated. These issues grow if you need to ask questions about product details, which a simple Google Translate search might not be enough for.
Reliability. While 1688 may offer lower prices, it is intended for the local Chinese market, which has different requirements and standards from international ones. The quality of products may vary a lot and you are not guaranteed to have your needs met reliably. Alibaba merchants are used to selling around the world, so they are better at meeting the standards of global customers.
International payments. While Alibaba accepts most international payment methods, 1688 does not. In theory, the site requires you to use a Chinese credit card, which can only be set up from within China. There are ways to get around this, such as by using a local agent to handle the payment process for you.
Verified sellers. Alibaba has a more rigorous verification process to ensure that all sellers on the platform meet its standards. Especially since the company serves customers all over the world, it works hard to build trust among this international clientele. While 1688 also verifies its stores, this process is less stringent, so there is a higher chance of dealing with unreliable sellers. This means a higher possibility of products looking different than in pictures on the site, arriving damaged, or not arriving at all. You might also see an unexpected variation in inventory batches, even though you ordered from the same manufacturer.
When sourcing products from 1688 it is important to remember that you need to use Chinese characters. Google Translate can help a lot with this. You can install the Google Translate extension on your internet browser, which can help translate whole web pages as you visit them. Just remember that these translations are not 100% reliable and their accuracy will go down as the complexity of terms goes up. When searching for a product unsuccessfully, you can also type in related keywords and synonyms, which can help a lot. This is a process that sourcing agents can help with as well.
When you do find a company to buy from, you may want to consider downloading WeChat, the primary form of communication in China. It will facilitate any dialogue with suppliers. Once you have decided what you want to purchase, it is highly recommended to get a local shipping partner, especially if you plan to buy from different suppliers. They can store, repackage and then ship goods to your location, as well as help with administrative processes.
1688 is great for small and large eCommerce companies. It offers many opportunities for acquiring affordable products that can do well in Western markets. This is especially important since very few international online sellers use 1688, meaning a smart business can gain big advantages in terms of pricing. Even new online sellers should consider it to source their products and gain a strong foothold in their sector.
What also makes the platform so great is the ability to build relationships with manufacturers, which can be leveraged to customize products, launch new ones, and improve shipping conditions. Being in good standing with a supplier your trust is priceless and can be a pillar of long-term growth.
While some hurdles need to be overcome, the rewards can repay your efforts multiple times. Finding a good product and getting past the language barrier are two issues that can be resolved with enough time and effort.
The payment situation, which is more complicated, is best addressed by partnering with a local sourcing agent. Such an entity can help ensure the smooth transport of batches of product from China to your warehouses. Established for this purpose, they speak English and can process international payments. They can assist with quality control and other bureaucratic issues that might arise.
Any partner that is fluent in Mandarin can also help you during the process of finding the products you want to sell, which is not intuitive if you don’t speak the language. While the potential rewards 1688 offers are great, so is the work required to reach them. If you feel like this might be a bit much for you, Alibaba is probably a safer choice.
When it comes to dropshipping, the many complications of 1688 make Alibaba a better choice for most. While 1688’s low prices are very enticing, the fact that Alibaba is able to receive payments and take care of international shipping directly makes it much more optimal for this purpose. Dropshipping with 1688 is still an option. If you have a good sourcing partner that is effective, it can be a highly lucrative operation, it will just take extra organizational steps. This is true for 1688, in general. The better prices and conditions are extremely attractive, but it will take serious work to overcome the language and bureaucratic hurdles involved.
Julian writes about the ins and outs of eCommerce at 8fig. He is passionate about exploring and covering the dynamic and fast-paced world of online retail.